Gold prices fell Monday as traders looking to diversify their safe-haven investments sold precious metals and bought U.S. dollars and dollar-denominated assets.
The move to the safety of the dollar was spurred by concerns that a Greek default -- now expected by virutally all market participants -- will hammer the euro and the shares of European banks exposed to Greek debt. Further, there could be a knock-on effect on the already fragile recovery of the global economy.
Such concerns resulted in the euro falling about 1.1 percent against the dollar and financial stocks falling on U.S. exchanges more than 3 percent.
Hopes that a weekend meeting of European financial ministers might produce a ray of hope that the continent's sovereign debt crisis might be fixed or at least contained to the weaker eurozone economies were dashed after the ministers couldn't agree on how to deal with the now 20-month-old challenge.
By the end of the weekend, the only speculation was about when Athens, beset with popular uprisings against austerity measures, would throw in the towel.
My analogy on the eurozone is we're playing a massive game of Whac-A-Mole. No one has any idea of what the resolution is, Phil Orlando, chief equity market strategist at Federated Investors in New York, told Reuters. The bigger problem is it doesn't appear to me at least that the Greek people have the appetite to follow through on the austerity measures.
The price of gold for December delivery slipped $35.80 per ounce to $1,778.9 per troy ounce. Gold for immediate delivery fell $40.21 to $1,774.31.
The price of silver was off $1.67 per ounce to $39.16, while silver for immediate delivery increased $1.60 to $39.12.